The deadline to register for an online self assessment tax return for 2018/19 falls this weekend on Saturday 5 October, so taxpayers need to act quickly
As more and more people are drawn into self assessment, either due to their earnings, gig working or changes to child benefits, it is essential to register for an online account on the HMRC website by the 5 October deadline in order to file an online self assessment tax return in January.
Last year, 700,000 taxpayers missed the self assessment deadline and faced penalties of up to £100 a day if they missed the online self assessment filing date of 31 January 2020.
Individuals need to complete a self assessment tax return for 2018/19 if:
- they earned more than £2,500 from renting a property;
- their partner received child benefit and either of them had an annual income of more than £50,000;
- they received more than £2,500 in other untaxed income, for example from tips or commission;
- they are self-employed sole traders, limited company directors, shareholders, or employees claiming expenses in excess of £2,500; or
- they have an annual income over £100,000.
Any of the above who have not registered for self assessment previously, or who have not filed online previously, need to register on the HMRC website.
As more people are pulled into self assessment, Zena Hanks, partner in the private wealth team at Saffery Champness warned: ‘With a growing number of self-employed, gig and access economy entrepreneurs using online self assessment, it is easy to forget that there is a myriad other taxpayers who also need to file a self assessment tax return, many of which may be running out of time to register.
‘The self assessment population includes anyone who is a shareholder, a limited company director or has an annual income in excess of £100,000. However, it also extends to those who have earned as little as £2,500 in either rental income or another form of untaxed income such as tips or commission and where a tax liability needs to be reported to HMRC.
‘Perhaps most surprising of all, self assessment is the designated tax filing system for parents who receive both child benefit and earn more than £50,000 per annum.
‘All-in-all these criteria apply to individuals in a diverse range of income brackets, occupations and statuses - from high-earning CEOs to those working a second job in order to make ends meet - which makes any targeted awareness campaign almost impossible to orchestrate effectively. Ultimately, it is often the case that many individuals are unaware of the registration deadline, with attention focused instead on the more conspicuous deadline to file their returns by 31 January.
There are also administrative issues as the registration process is not automated, but relies on confirmation of an access code which takes up to 10 days to be sent out by HMRC.
Hanks explained: ‘It is important to remember that the registration procedure is by no means an immediate process, and requires an activation code which will only arrive, by post, within 10 days of registering. This is important to bear in mind when considering timescales.
‘If a taxpayer fails to register in time and is therefore unable to file their return by 31 January, like those of previous years, they may be subject to HMRC’s fines, which depending on the length of the delay, can tally into the thousands of pounds.’
Go to HMRC gov.uk to register for an online Self Assessment tax return